Friday, September 28, 2012

Tempur-Pedic Buys, You Sell!

Earlier this year, shares of premium mattress maker Tempur-Pedic fell from a lofty $87 to just $20, at which point the stock was brought up on this site as a potential value investment. Yesterday, investors were offered the opportunity to sell these same shares for a 50% premium to the price on that day.

Wednesday, September 26, 2012

Net-Net Solitron's Bizarre Behaviour

Communicating with management is something many shareholders like to do. But it's not always easy. My belief is that if you're not calling on behalf of a name-brand Wall Street firm, most managers have little time for you. Consider the treatment experienced by a value investor who tried to communicate with the CEO of Solitron Devices, a company whose shares trade at a large discount to its net current assets.

Thursday, September 20, 2012

Manhattan Bridge Update

Readers may recall that last week an interview with Manhattan Bridge Capital CEO Assaf Ran was carried here. In our conversation, I implored Mr. Ran to buy back shares at the large discount to book value at which the company trades, rather than continue to invest at the company's current rate of return. Mr. Ran promised to take my request to the board, and publicly announce the board's decision. That decision was announced yesterday.

Human Action: Laissez-Faire Capitalism

As central banks have continued to employ stimulative measures, proponents of Austrian economics are sounding the alarm. To the latter group, policies such as quantitative easing distort market prices, resulting in malinvestments that will have consequences (e.g. a housing bubble fueled by low rates that shifted too much capital from productive uses into housing, the effects of which we have been feeling for a few years now). To understand this philosophy better, I recently read Human Action by Austrian economist Ludwig Von Mises.

Monday, September 17, 2012

The Dolan Company: Monopoly Businesses

The Dolan Company (DM) operates what appear to be several high-margin, monopoly-type businesses. And yet the company trades for a P/E of just 5! What gives?

Thursday, September 13, 2012

Negative Momentum

Though it might seem absurd to value investors, there are market participants out there who buy (sell) securities only because they have gone up (down). They profess the superiority of momentum investing. Are they right?

In decades past, making such a determination was a laborious undertaking, available only to those academics with the time and inclination, and the financial firms with the scale to be able to profit from such an effort. Today, however, the proliferation of powerful computing tools has democratized this process. Below I discuss a quick test of momentum I conducted in the shares of a highly liquid (Apple) company, and one that isn't so liquid (Manhattan Bridge Capital).

Tuesday, September 11, 2012

Interview With CEO Of Manhattan Bridge Capital

I recently spoke with the CEO of embattled firm Manhattan Bridge Capital (LOAN). Mr. Assaf Ran and his company have been discussed on this site before, mainly due to the large discount at which the company trades relative to its book value. The firm has had a tumultuous couple of years, involving a rejected buyout offer from a disgruntled shareholder, large restricted share grants to its majority shareholder, and shareholder lawsuits over some of the company's actions. Assaf Ran and I discussed these topics and more.

Sunday, September 9, 2012

The Innovator's Dilemma: Chapter 10

Companies are susceptible to losing their customers as a result of disruptive technologies. In The Innovator's Dilemma, Christensen demonstrates that companies are overtaken despite doing everything right - listening to customers and investing in the highest-return projects. By studying the disruptive process, Christensen shows how companies can defend themselves from disruptive technologies.


Saturday, September 8, 2012

The Innovator's Dilemma: Chapter 9

Companies are susceptible to losing their customers as a result of disruptive technologies. In The Innovator's Dilemma, Christensen demonstrates that companies are overtaken despite doing everything right - listening to customers and investing in the highest-return projects. By studying the disruptive process, Christensen shows how companies can defend themselves from disruptive technologies.


Friday, September 7, 2012

Stacked Deck At Full House Resorts

Full House Resorts (FLL) has all the makings of a great value stock. With a market cap of only $50 million against double-digit millions in free cash flow and a strong net cash position, the company looks seriously undervalued.

Thursday, September 6, 2012

Extreme Value Hedging

Activist investor Chuck Gillman recently recommended the book Extreme Value Hedging to me. In Chuck's opinion, making predictions about the future is incredibly difficult, so his preference is to profit from changes that can be made to improve poor capital allocation decisions. The book was a good introduction to many of the opportunities and challenges facing activist investors.

Monday, September 3, 2012

The Innovator's Dilemma: Chapter 8

Companies are susceptible to losing their customers as a result of disruptive technologies. In The Innovator's Dilemma, Christensen demonstrates that companies are overtaken despite doing everything right - listening to customers and investing in the highest-return projects. By studying the disruptive process, Christensen shows how companies can defend themselves from disruptive technologies.


Sunday, September 2, 2012

The Innovator's Dilemma: Chapter 7

Companies are susceptible to losing their customers as a result of disruptive technologies. In The Innovator's Dilemma, Christensen demonstrates that companies are overtaken despite doing everything right - listening to customers and investing in the highest-return projects. By studying the disruptive process, Christensen shows how companies can defend themselves from disruptive technologies.


Saturday, September 1, 2012

The Innovator's Dilemma: Chapter 6

Companies are susceptible to losing their customers as a result of disruptive technologies. In The Innovator's Dilemma, Christensen demonstrates that companies are overtaken despite doing everything right - listening to customers and investing in the highest-return projects. By studying the disruptive process, Christensen shows how companies can defend themselves from disruptive technologies.


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